October 13th, 2020 | 13:34 CEST
Bayer, Barrick, Desert Gold: In Gold we trust!
The global economy moving at different speeds. In the USA, the ISM index for services is once again expanding slightly. In China, the mood in the service industry is once again pointing to a veritable recovery. In the eurozone, the economic sentiment examined by the analyst firm, Sentix, remains robust but without any new highs. Even with the rising infection rate, the pandemic will come to an end eventually. In Germany, economic data such as industrial orders, production, and exports, showed a slight slowdown in August. Nevertheless, the stock markets are swinging to new heights daily, as the latent threat from the infection necessitates further liquidity packages from governments. This monetary policy continues to imply very low-interest rates, a weakening USD, and rising inflation expectations. This environment should keep the demand for precious metals at least at a high level, so we remain on the lookout.
time to read: 3 minutes
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Author:
André Will-Laudien
ISIN:
CA25039N4084 , DE000BAY0017 , CA0679011084
Table of contents:
"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Author
André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
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BAYER - The lowest level since 2011
Glyphosate is anything but gold. Firstly, the countless legal disputes that are still pending, then the bleak business outlook - Bayer stock has been badly hit by the investors. Given the current situation, it is "actually absurd" that the contract with CEO Werner Baumann is only recently received a 5-year extension. Since he became CEO in May 2016, the price of Bayer stock has fallen by almost to one-third from its all-time high.
Analysts have not been happy with the stock for a long time, and some have suspended their current assessment of the tumbling pharmaceutical and chemical giant for the time being due to low market expectations. Not a good omen for the near future, fortunately, there are other more attractive heavyweights in the DAX.
BARRICK GOLD CORPORATION - Gold price meets the increasing demand.
Barrick Gold, one of the world's largest gold producers, can nicely profit from a current gold price of over USD 1,922 per troy ounce. In mid-2020, the price of the precious metal was already trading briefly above the USD 2,070 mark per troy ounce. Barrick is currently mining an ounce at a total cost of just under USD 1,030, so with around 4.7 million ounces produced, a substantial profit remains on the books. Against the background that central banks around the world have significantly increased the amount of money in circulation in recent months, many observers believe that the current spot price of gold is only a short pause.
Investors who want to get involved in precious metals but shy away from buying physical bars and coins are increasingly buying shares of Barrick Gold. The best-known new owner in the gold camp is the US investor Warren Buffett, who recently announced the purchase of Barrick shares by his investment company, Berkshire Hathaway - and as is well known, he only buys what he understands and believes in. So we do!
DESERT GOLD - Good triplets in Westmali fuel takeover fantasy
Desert Gold Ventures Inc. is a gold exploration company that owns two projects in western Mali (SMSZ and Djimbala) and the Rutare gold project in central Rwanda. The Company's current focus is its 410 sq km SMSZ project, which covers approximately 38 km of the productive Senegal-Mali shear zone. Drill samples indicate gold grades of up to 3.96 grams Au per tonne rock in all four exploration zones. To date, the SMSZ project is the most extensive contiguous, non-producing land package with this highly prospective structural feature.
Jared Scharf, CEO of Desert Gold, commented: "We're very encouraged by these results. Our air core results have both continued to expand the scope of recently discovered gold mineralization at the Barani Gap and resulted in the discovery of new gold zones at Sorokoto North, Kolon and Soa South. As well, the new auger results further emphasize that, in our opinion, we will find more gold zones."
The next steps are to work on a 43-101 standard technical report, which is due to be released in late October or early November. Field exploration, including approximately 20,000 meters of additional drilling, will resume in November and then continue until early July 2021.
Having halved in value since early August, the stock could quickly become a takeover candidate based on the current good news. With a market capitalization of just under CAD 18 million (about EUR 12 million), the M & A screens at the larger mines are certainly already lit up in continuous operation. Take the Desert Gold Ventures speculatively on their investment list in order not to be surprised here. Insiders of the company also repeatedly buy shares of the company and disclose this information.
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